The outlook for the pair is bearish, with the next key support being at 15,000.
Sell the BTC/USD pair and set a take-profit at 15,000.Add a stop-loss at 20,000.Timeline: 1-2 days.
Set a buy-stop at 20,500 and a take-profit at 22,000.Add a stop-loss at 18,000.
The BTC/USD pair crash continued during the weekend as sentiment in the cryptocurrency industry waned. Bitcoin declined to a low of $17,700, which was the lowest level since 2020. This price was significantly lower than the all-time high of almost $70,000.
Bitcoin Sell-Off Accelerates
Bitcoin and other cryptocurrencies continued their sell-off as investors continued worrying about the new Fed policies and the soaring inflation. The market sentiment is equally negative across most asset classes.
The ongoing BTC crash coincides in a period when American stocks have been in a sharp decline. For example, the S&P 500 index officially moved to a bear market last week.
These assets declined as worries of a more hawkish Fed continued. In its interest rate decision last week, the Fed decided to hike interest rates by 0.75% for the first time in almost three decades. It also hinted that it will deliver another 0.75% or 0.50% in the coming month.
This hawkishness is happening at a time when investors are anticipating a recession as the American economy weakens. For example, data published last week revealed that the country’s building permits and housing starts declined sharply in May.
Meanwhile, the BTC/USD pair is falling as participants in the industry see red. Last week, it was reported that MicroStrategy was staring at a margin call as the value of Bitcoin holdings plummets. Last week, Celsius hired restructuring experts after a crisis in its operations emerged. There are fears that the crypto lender will soon go burst.
Three Arrows is another crypto company that has been in trouble. Once a $10 billion hedge fund, the company has seen the value of its holdings plummet in the past few months. There are worries that it won’t survive. Worse, other major players in the industry are going through similar issues.
The BTC/USD continued its downward momentum as demand for the coin evaporated. This sell-off gained steam after the pair moved below the important support at 20,000. It also managed to move below 2017 high of 19,700.
Bitcoin remains below all moving averages, as shown in the daily chart below. At the same time, oscillators like the Relative Strength Index (RSI) and the Stochastic have moved below the oversold level.
Therefore, the outlook for the pair is bearish, with the next key support being at 15,000. A move above the key resistance at 20,000 will signal more upside.